Max Financial Services Ltd said on Monday it has called off a proposed merger of its life insurance business with HDFC Standard Life Insurance Company Ltd, ending a one-year-long effort that failed to receive regulatory approval.

The exclusivity agreement to explore a merger with HDFC Life, valid till 31 July, will not be renewed, billionaire Analjit Singh-led Max Financial said in a statement.

Max Financial and mortgage lender Housing Development Finance Corporation had agreed to merge their life insurance arms in August last year. The deal involved the amalgamation of Max Life Insurance Co. Ltd with Max Financial, followed by a demerger of the life insurance business into HDFC Life.

A merger would have created India’s biggest life insurer in the private sector. It would have also allowed HDFC Life to get listed on the stock exchanges without an initial public offering that it had planned before initiating the merger talks.

However, the deal hit a roadblock late last year when the Insurance and Regulatory Development Authority of India objected to the transaction structure. The two companies tried to tweak certain terms and conditions of the deal but couldn’t convince the industry watchdog.

Max Financial said that the prospective partners had evaluated several alternative structures over the last month. “However, the inordinate time associated with finalization and approval of these structures led to this decision,” it said.

The company said that it will continue to make investments to expand its business and that it will pursue acquisition opportunities as the industry consolidates.

With the merger plan scrapped, HDFC Life has gone back to the drawing board for an IPO. The company’s board approved a plan for the IPO earlier in July.

HDFC Life is a joint venture of HDFC and the UK-based Standard Life Plc. The mortgage lender owns 61.65% and Standard Life 35% of the insurer while minority shareholders hold the remaining.

HDFC plans to sell a 9.57% stake and Standard Life 5.43% stake through the IPO.

Last week, VCCircle reported that the insurer had hired eight merchant banks for the IPO of as much as Rs 7,000 crore ($1.1 billion).

HDFC Life will follow rival SBI Life Insurance Co Ltd, which has already filed its draft papers with the capital markets regulator Securities and Exchange Board of India for an IPO. Last year, ICICI Prudential Life Insurance became the first life insurer in India to go public. These companies compete with state-run Life Insurance Corporation of India, the country’s biggest insurer.